Not unexpectedly, the Toronto and Region residential housing market softened in August. That softening was nuanced and complex.
Other than the month of January of this year, the average sale price for the entire Region has not dipped below $1 million. But it did in August, the first time (other than January) since 2020. It came in at $993,410, 2.7 percent below last year’s average sale price of $1,021,300. August average sale price for the entire Region is deceptive. It includes prices achieved for all types of properties, detached, semi-detached, townhouses and condominium apartments, and includes all reported sales in the City of Toronto and the 905 Region. It is the result of a combination of micro-markets that need to be analyzed individually in order to understand the Toronto and Region housing market.
In August, 1,330 condominium apartments were reported sold. In total, there were 5,057 sales reported in August for the entire Region, 2.1 percent less than the 5,168 homes that changed hands last year. The 1,330 condominium apartment sales represented more than 26 percent of the resale market. The average sale price for all condominium apartment sales came in at $617,593, heavily weighing the overall average sale price downward.
The resale market’s performance in the 905 Region was dramatically different than resale results in the City of Toronto. In the City of Toronto, sales for all property types combined declined by 1.6 percent in August. If the 165 recorded townhouse sales are removed from that calculation, sales of detached and semi-detached properties actually rose this August compared to last year, with condominium apartments coming in flat. Sales results in the 905 Region were not as flattering. In the 905 Region, combined sales of all property types declined by 4.25 percent, with condominium apartments declining by almost 7 percent.
There was a similar delta with average sale prices. Combined average sale prices in the City of Toronto declined by a little over 4 percent. If the 165 recorded townhouse sales are removed – they declined by almost 13 percent – there was almost no movement in average sale prices compared to last August. Once again, the story that unfolded in the 905 is quite different. Overall average sale prices declined by more than 6 percent, effectively responsible for the overall Region’s negative results.
It would appear that the post-COVID pandemic housing recalibration is still taking place in the 905 Region. During the pandemic housing market, throughout 2021 and most of 2022, the 905 Region was the most robust of the two marketplaces. Housing was less expensive, buyers got more for their money than in the City of Toronto, and there was relief from the density of housing south of Highway 401. Remote work also became popular, allowing people who lived in the 905 Region who had jobs in the City to work from home, avoiding the Region’s clogged driving arteries.
Most of COVID-19’s driving housing factors are no longer in play. The need for sanctuary housing is no longer a necessity, and many jobs that could be performed remotely have been mandated to return to the office, many located in the City of Toronto. CoStar, a commercial real estate information provider, has recently reported that the availability rate for downtown Toronto commercial buildings has been halved, and that vacancy rates have dropped to 5.6 percent from 11.9 percent in 2024. With commutes being worse than ever, it is not surprising that City of Toronto housing is once again being viewed more favourably by buyers.
It should also be noted that inventory levels continue to shrink, a pattern beginning in 2026, with fewer properties coming to market each month. Although inventory levels are decreasing, the 24,482 properties available to buyers at the end of August are still high by historical standards. In August of 2019, there were 15,870 homes available for buyers to purchase, 35 percent fewer than the 24,482 homes available at the end of August. If fewer properties continue to come to market as 2026 moves towards year-end, the resale market will find itself with a shortage of available properties as the market moves into 2027, the year in which the Toronto and Region housing market is forecast to begin recovering.
August’s resale data is static and not forward-looking. During the month of August, US-Canada trade talks came to a disappointing end, with the latest US 50 percent tariffs taking effect on August 22nd. Canada has scheduled retaliatory tariffs to take effect September 8th. No one can predict the impact of those developments on southern Ontario with any certainty, but the consensus is that they will be economically negative, leading to job losses and rising costs. Job losses and rising costs are not conducive to a buoyant resale housing market. Earlier hopes for slightly improved 2026 resale results have been dashed. In 2025, 62,312 properties were reported sold in the Toronto Region. Forecasting 2026 year-end numbers, based on results to the end of August, points to no more than 62,000 sales by the end of December. Plus ça change plus la meme chose.
